YOU ASK:

Can I have both group and universal life insurance coverage?

WE ANSWER:

Owning both group and permanent life insurance is not only allowed but also strongly advisable. If the company you work for offers a free or low-cost benefits package that will protect your family in the event of your death, this is an excellent way to save money on life insurance.

However, bear in mind that you will need some extra coverage in case you leave your current job, since in such a case your group life insurance will be terminated.

Characteristics of Group Life Insurance

  • Group life insurance provides life insurance to a group of people on a single master contract.
  • It is a good idea to use group life insurance in addition to any individual life insurance to provide extra funds which your family might need in the event of your death.
  • No proof of insurability, such as a physical examination, is required for group life insurance.
  • Your group life insurance will stay in force as long as you are employed by the respective company. If you decide to leave or get redundant, the coverage is terminated. This is why it is not a good idea to rely on your employer's group life insurance alone.

Universal Life Insurance

A universal life insurance policy is the perfect solution for those who need permanent life coverage but are worried that they might not always be able to pay the premiums on time. Due to its great flexibility, universal life insurance is by far the most popular flexible premium policy in the United States.

  • Universal life insurance allows you to both modify the face value and choose how much to pay in premiums.
  • If you overpay in premiums, the extra amount will go into the policy's cash value.
  • Universal life insurance cash value is treated as an investment since interest rate is paid on the cash value.
  • The insurer's annual minimum guaranteed interest rate is typically 4 percent, and the excess interest rate may vary from year to year, at the discretion of the insurance company.
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